Geely Aims Sedan At U.K. Market

BEIJING—Zhejiang Geely Holding Group Co. plans to start selling a Chinese-produced sedan in the U.K. by the end of next year, a move that the auto maker says marks the beginning of a broader push to go beyond the world’s emerging markets.

Through a local wholesaler, the Chinese auto maker said it plans to offer to U.K. drivers the Emgrand EC7, a midsize four-door sedan, initially with 1.5-liter and 1.8-liter gasoline-engine options. The car is expected to retail for £10,000, or about $15,600, and is one of half a dozen models Geely and its distributor plan to sell eventually in the U.K. to support a network of as many as 60 dealers by around the end of 2014.

Geely’s wholesale distributor, Geely Auto UK, wants to repeat the success that South Korean companies such as Hyundai Motor Co. and Kia Motors Corp. have achieved in the U.K.

“In the West, there still is a strong perception that Chinese quality is questionable or not as good as Western quality,” said Matthew Cheyne, market-development director at Geely Auto UK. “But we believe we have a product that is quality-wise better than most people expect it to be.” Roughly two years after the 2012 launch, he added, Geely Auto UK aims to sell 3,000 Geely vehicles annually.

Victor Yang, a spokesman for Geely, said the China-based company is still mostly focused on the developing market and “”we still have a long way to go before we can even attempt to take a big bite out of an advanced market” like the U.K. But he said it is part of a broader effort to “tip-toe” into the European market.

The move reflects the international ambitions of China’s auto makers, particularly Geely, which last year acquired Volvo from Ford Motor Co. in a deal that put a global auto maker in Chinese hands for the first time. A number have made inroads abroad, particularly in truck markets, but Chinese brands still suffer from a perception that their quality doesn’t match that of Western and Japanese brands.

Mr. Yang said the U.K. move reflects the company’s belief that its quality has improved, helped by established global component suppliers such as Austrian engine-technology company AVL List GmbH. To back its claims, Geely plans to offer a five-year, 160,000-kilometer warranty.

Geely could be stepping into the U.K. market at a tough time, however. New passenger-car registrations, a proxy for car sales, fell 4.5% during the first 10 months of 2011 compared with a year earlier, totaling about 1.8 million amid economic softness, according to the European Automobile Manufacturers’ Association.

Geely Auto UK, the wholesaler, was set up by Manganese Bronze Holdings PLC of the U.K. Geely and Manganese Bronze are already partners in building London black cabs in the U.K. and China.

Geely’s efforts follow a move by China’s state-owned SAIC Motor Corp. to make a push into Europe with the launch of an MG sedan earlier this year, which revived the well-known British car brand and allowed Shanghai-based SAIC to start developing a network of dealerships across the U.K. SAIC began in May selling a four-door sedan, the MG6, through some of its own stores in the U.K.

SAIC purchased technology from the now-defunct MG Rover Group Ltd. in 2005 and has developed a lineup of cars now sold in China under brand names Roewe and MG Mingju. Great Wall Motor Co.—a company in Baoding, an industrial city 160 kilometers southwest of Beijing—has exported small pickup trucks and other vehicles to Italy in recent years. Great Wall Motor shipped some 2,000 vehicles last year.

Few Chinese-produced cars are currently being exported to the U.S. Geely executives have said selling cars in the U.S. market isn’t a top priority. Frank Zhao, Geely’s product-development chief, said that at this point the company is paying more attention to developing markets in Southeast Asia and the Middle East, as well as Russia. “Products we offer are very attractive to consumers in those markets,” he said in an interview earlier this year.